Illegal lithium mining: Poser for Zimbabwe

24 Mar, 2023 - 00:03 0 Views
Illegal lithium mining: Poser  for Zimbabwe

eBusiness Weekly

Golden Sibanda

The spontaneous manner in which lithium is being informally discovered in many parts of Zimbabwe has made it difficult for the Government to stem illegality in the way the globally sought-after electric vehicle (EV) batteries mineral has recently been haphazardly extracted in many areas.

Rising demand for EV batteries lithium, as the world shifts to electric cars to curtail emissions from burning fossil fuels, has sparked a lithium rush in Zimbabwe, where the mineral is “awash” and occurs near the surface across parts of Zimbabwe, and can be easily extracted.

As global demand rises, a number of large-scale investors, mostly Chinese, recently swooped on lithium assets dotted across the length and breadth of Zimbabwe, including Prospect Resources’ Arcadia Mine and Premier African Minerals’ Zulu Lithium.

In January this year, China’s Sinomine Resource Group, through its Hong Kong-listed unit, bought 100 percent of African Metals Management Services and Southern African Metals and Minerals, which control 74 percent of Bikita Minerals.

Secretary for Mines and Mining Development, Pfungwa Kunaka, confirmed the Government was in receipt of reports that the EV batteries lithium had been discovered in many parts of Zimbabwe, even occurring in odd places like people’s backyards.

He said one of the provinces where illegal and widespread haphazard mining of the in-demand mineral was rampant, was the area bordering Prospect Resources’ Arcadia Mine, Zimbabwe’s most advanced greenfield lithium project, which is in Mashonaland East province.

This was corroborated by a senior executive with Prospect Resources Zimbabwe, who indicated that while the illegal miners had not encroached into the company’s mining claim at the Arcadia project, a lot of digging for lithium had been going on in areas nearby and further up to Goromonzi.

However, other key hotspots, Kunaka said, apart from the area around Goromonzi, 40 kilometres east of the capital Harare, illegal mining was rampant in Makaha (Mutoko), also in Mashonaland East and Mberengwa in the Midlands province.

The lithium mad rush comes after Zimbabwe banned the export of raw lithium late last year, amid the rampant illegal extraction and smuggling of the globally sought-after commodity by mostly artisanal miners.

Following reports of the widespread illegal mining of the EV batteries mineral, Mines and Mining Development Minister Winston Chitando, in December last year outlawed the export of lithium in its raw form, citing provisions of the Base Minerals Export Control Act.

Export of lithium ore and unpurified lithium salts were banned unless the producer can prove that there are special circumstances, and even then exporters would have to pay the special 15 percent export tax.

Registered players in the process of setting up beneficiation and value addition facilities were, however, exempted from the ban.

Zimbabwe wants mineral exports to be refined or beneficiated within Zimbabwe to the standard levels required for international trade to add value to the finite mineral resources and ensure that the value addition is done in Zimbabwe, creating jobs and optimising returns.

In terms of the new regulations, “unbeneficiated lithium” means any lithium in whatever form that has not undergone processing to an extent that would exempt it from the payment of the 15 percent export tax under section 12B of the Value Added Tax Act .

Despite having only a single producing lithium mine, in Bikita Minerals, with several others at various stages of development, Zimbabwe is already Africa’s largest and the world’s fifth biggest producer of lithium.

Mining is a strategically key sector for Zimbabwe, accounting for more than 75 percent of the country’s annual export earnings. The Southern African nation shipped nearly US$10 billion in 2022, driven largely by minerals.

Zimbabwe has a mining roadmap targeting to grow the mining industry into a US$12 billion industry by end of 2023, with lithium expected to play an integral part in the realisation of the milestone by contributing at least half a billion United States dollars.

Kunaka said the Government had received numerous reports of illegal lithium mining, but enforcing the law against offenders was a bit complex given the irregular manner in which the mineral was occurring and the unlawful mining conducted.

“For us to classify the illegality is a bit difficult. There are communities, and villagers who are discovering the mineral in their farms and backyards. Of course, the law says it is illegal to mine without a mining title, but if you look at the times we are in (it’s difficult to enforce).

Already, Zimbabwe officially recognises artisanal mining, especially with respect to gold production where the sector accounts for more than 60 percent of the total output, making it difficult to completely outlaw it in lithium.

“There is a miner who has come across this globally sought after mineral, a bit easy to mine, so the extent of illegality; we have to balance it between the way (this mineral) is occurring (and the illegality),” he said.

Kunaka said the Government had moved swiftly to restore sanity where the illegal and haphazard extraction of the mineral, mostly by artisanal miners, threatened to spill out of control amid growing illegal export and smuggling out of the mineral in its raw form.

The Government said it was losing US$1,8 billion in mineral revenues due to smuggling and externalisation to South Africa and the United Arab Emirates. Gold is, however, still the most smuggled mineral.

This assertion was echoed by Harare East legislator, Tendai Biti, during a recent session of Parliament when he said he was concerned about the issue of illicit financial flows from Zimbabwe, especially through mining.

Without backing his claims with evidence, Biti pointed fingers at some of the major mining houses in the country as the culprits, including taking advantage of gaps in the country’s systems to sprit out billions of US dollars.

“We are losing over US$2 billion annually in illicit financial flows.  What we are losing in terms of illicit financial flows is actually more than what we are getting in terms of diaspora remittances US$1 billion.

“Most of the mining model in Zimbabwe is extractive.  You come in, you loot and you get out leaving total destruction, unemployment and so forth.  Look at the status of Mhangura in Mashonaland West Province, it is a ghost town.

“Go to Renco in Masvingo, the road there looks like a road that was built in 1492 but they have been getting gold from our country.

In December last year, Police intercepted trucks with lithium ore in Mutoko, destined for smuggling via Mozambique, even though all exports of lithium ore and inadequately processed lithium had been banned.

In terms of lithium, Kunaka said the Government first banned export of raw lithium and then moved further to stop exploitation of the mineral without the relevant permits.

“So, the problem is the manner in which this mineral is occurring… for you to place a demarcation between someone who is doing it illegally and one doing it legally (it is difficult) when the mineral is in their backyard (becomes difficult),” he said.

But beyond the activities of small-scale and indigenous artisanal miners and farmers participating in illegal mining of lithium in the country, Kunaka said even foreigners who have been extracting different minerals, had joined the gravy train.

“We have seen camps sprouting as well as business places, shacks and restaurants in places like Mutoko deep in the forests; that we do not want, it is exposing our people to illegality; kind of legitimising illegality, which we do not want.”

The mining industry in general has artisanal miners that, by nature, engage in small-scale mining that is mostly illegal. And that is not only unique to lithium, but cuts across many such minerals as chrome, gold, tantalite, diamonds etc.

Weighing in on the issue, Zimbabwe Indigenous Lithium Miners and Processors Association (ZILIMPA) president, Brains Muchemwa, said the big deposits of lithium in Zimbabwe were already secured by big international companies that are listed offshore and are already mining, without interference from artisanal miners.

He said, in any case, the output from the artisanal illegal miners was very insignificant and had little impact on the broader lithium industry.

“Considering the ban on exports of unprocessed lithium ores, most of the illegal mining by artisanal miners in Mutoko and Mberengwa has stopped due to the unavailability of a ready market,” he said.

However, he pointed out that ZILIMPA was working closely with domestic financial institutions to set up a dedicated line of credit accessible by indigenous lithium players who, by nature, are disadvantaged by lack of capital yet they hold a prominent role in the renewable energy revolution that is unraveling across the globe.

Studies have revealed that in most African countries, artisanal and small-scale mining has contributed positively to the economies through job creation, increased mineral output, specifically gold, and concurrently economic growth.

Nonetheless, the downsides of unregistered and unregulated small-scale mining activities overshadow the benefits derived from it.

Notable negativities associated with artisanal and small-scale mining include loss of mineral revenue through smuggling, food insecurity, destruction to surface and underground water through toxic contamination and pollution caused by mud and sediments, air and noise pollution and destruction of biodiversity, including the natural flora and fauna and water species.

Death, injuries, respiratory and skin diseases, noise-induced hearing loss, physical and psychological stress, malaria, and HIV are among the common legacies of illegal mining.

As the world shifts to clean energy, especially electric mobility, lithium has become a critical component in high energy-density rechargeable battery manufacture due to its high electrochemical potential.

Battery makers anticipate that lithium-ion batteries will keep dominating the industry as they are now 30 times cheaper than when they first came to the market in the early 1990s.

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